For the time being, I’ll stick to my guns and what’s working for me — small-cap momentum stocks. So far this year, my Jason Bond Picks strategy is up more than $20,000… and I haven’t even been trading a whole lot.

My patterns are able to spot some of the best setups in the small-cap space… and right now, they’ve uncovered three stocks that could make a significant move very soon.

What are those patterns, and what stocks are on my watchlist right now?

Fish Hooks and Rockets Are All You Need

My bread-and-butter setups are the fish hook and rocket… and the best part, you don’t need to study technical analysis for years to spot them.

If you look at PIR right now, it looks like a textbook fish hook setup. The stock suffered a massive drop… found support, and is starting to catch a bounce.

With that being said, when I see this pattern come up in a small-cap stock… I know it’s time to put it on my watchlist and develop a trading plan. Of course, if I make any moves, I’ll be sure to alert my Jason Bond Picks premium clients.

The next stock on my watchlist is also showing signs of a potential bounce. LSB Industries (LXU) is right at a trend line support… and it looks like it’s starting to form the fish hook pattern.

It’s the same idea as with PIR. LXU suffered a massive drop… found some support, and is starting to catch a bounce.

The Rocket Pattern

The rocket pattern is a little different than the fish hook pattern. You see, with the fish hook pattern, I’m looking for beaten-down names poised to reverse. On the other hand, with the rocket pattern, I’m looking to play for the breakout. In other words, I’m looking for strong stocks here.

For example, take a look at Genetic Technologies (GENE).

With the rocket pattern, you have to be careful because these stocks could go through wild swings. So when I see this pattern come up, I often use the Fibonacci retracement tool to find key entry, stop-loss, and target zones.

Now, I actually traded this stock… and here’s what I sent out to my clients.

Well, the stock didn’t want to break above $5 that day… but the pattern is still intact. So I locked in a small $652 winner. Despite the trade not being a monster, I was glad I stuck to my plan.

I’ll keep this on my watchlist, and I’ll be sure to let my clients know if I make any moves.

Political tensions rose over the weekend, as Iran admitted it lied and “mistakenly” shot down a Ukrainian passenger jet… yet, futures were trading higher early this morning. Talk about a wacky market.

Since when did political tensions not matter, especially when we’re looking at a potential war. Not only that, but it seems as if traders have been too complacent… and that’s when things could take a turn for the worse.

I don’t know about you… but I don’t want to be long any stocks related to the overall market because I don’t want to wake up with knots in my stomach and staring at a gap down. Instead, I’m going to stick with what’s working for me — small-cap momentum stocks.

For the most part, we’re seeing proof that small-cap momentum patterns are working…

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Missed out on this monster win? Find out how RagingBull Elite can help you achieve your trading goals and call (833) 498-5427

So why does trading small-cap stocks work so darn well in this environment, and any market environment for that matter?

Small-Cap Momentum Strategy Is Pummeling The Markets

On any given day, small-cap momentum stocks dominate the leader board. Just take a look at Friday’s action for some small caps…

Think about it like this… small-cap stocks have market capitalizations between $300M and $2B. It’s very unlikely a market headline will affect them. Quite simply, they move to the beat of their own drum.

So when the direction of the overall market isn’t clear, I love to pounce on these momentum stocks. You see, over the years, I’ve figured out that my patterns work extremely well.

I think the best way for you to understand how to trade in a foggy market is to go over a real-money case study… and I’ll show you one of my favorite setups — the fish hook pattern.

Fish Hook Pattern Reels in $12K Winner

I alerted my clients about a potential January effect play in Overstock.com Inc (OSTK).

Of course, I let my Jason Bond Picks clients know I was keeping an eye on this stock. It was one of my favorite stocks, and it played into the January effect thesis.

Stocks I’m looking to buy soon for January effect are OSTK and I, hopefully in the middle $6’s on both. No rush for new positions since the market is likely to see some selling early this week. Swing trades with hold times ranging from a few days to a few weeks is what you should expect here.

If you look at the daily chart in OSTK… the stock got smoked from September all the way until late December. When a small-cap stock gets destroyed like that… it’s when I love to look for my fish hook pattern.

So we had a few things going for the stock… the January effect thesis… and it found some support and started to catch a bounce.

Here’s what I look for with my fish hook pattern.

The stock experiences a massive drop

The stock finds support and holds, it’s what I call an area of value.

The stock to catch a small bounce.

Take a look at the chart in OSTK above and be mindful of the fish hook pattern conditions. That looks like a textbook setup to me.

However, I was a little late to the party… I got in OSTK after it caught a massive bounce last week.

Of course, I was chasing a little because I was stubborn the other day… but I’m not mad about it. In fact, the move higher was actually confirmation OSTK could run higher.

Sure, I didn’t get the price I wanted… but I didn’t miss out on the trade. Since I did chase, I wasn’t looking for a massive winner, just 5-10%. However, at the time, I figured OSTK had massive upside potential, and it could’ve been good for a 20%+ winner.

Here’s a look at what happened with OSTK.

Not too long after, OSTK started to ramp higher… and one day, it hit a high of $8.83… and I sold into the momentum.

Just by focusing on small-cap stocks, I locked in about 10% overnight, a $9,000 profit overnight!

Of course, I took some profits off the table and tried to juice a little more out of the trade. But I wasn’t going to just leave it on without protecting my profits.

So for the rest of my position, I actually put a stop-market order.

Well, my order got hit at $8.50 on the remaining shares, so I still came out on top with about a 10% winner overall.

That was good for approximately $12,000 overnight!

Right now, I don’t think it’s a great time to be solely focused on the overall market… especially when small-cap stocks are rocking.

It’s been a wacky market, to say the least, as political tensions rose earlier this week… as the Dow futures looked to gap down on Tuesday, only to turn positive on the day.

The Nasdaq and S&P 500 notched record highs this week… and traders are still trying to make sense of the market.

This morning, Iran came out and admitted they “accidentally” shot down a Ukrainian jetliner. That means we could be setting up for a massive gap down come Monday, who knows. Whatever the case may be, I’ll be ready.

Tom Brady couldn’t have said it better, “In both life and football, failure is inevitable. You don’t always win. You can, however, learn from that failure, pick yourself back up with great enthusiasm, and place yourself in the arena again…And that’s right where you’ll find me. Because I know I still have more to prove.“

This actually applies to the markets as well. However, we have to approach it a little differently. For the most part, as traders, we have to journal all of our strategies and see exactly what our money makers are, and where our losses are coming from (if any).

Two Patterns, More Than $20K In Profits

Last year I started Q1 up about $300,000 and took a 2-month break from trading… and it was all thanks to my small-cap momentum trades. As I reviewed my trades, I realized these are the best plays for me, especially when it’s hard to figure out the direction of the overall market.

So I’m sticking to my guns, and I’ll be focused on these plays for the time being.

Let me show you how it all works… and I want to kick things off with my trusty fish hook pattern.

Fish Hook Pattern Reels in $12K Winner

It’s really simple with this setup. All I’m looking for is beaten down names that have found a support level and just starting to bounce.

With this setup, there are 3 things I’m looking for:

The stock experiences a massive drop.

The stock finds support and holds.

The stock to catch a small bounce.

Well, I spotted this pattern in Overstock.com (OSTK), and I just knew I had to get in. Just take a look at the daily chart in OSTK.

OSTK had a massive drop during the last few months of 2019… and found some support. That was a sign OSTK could reverse and catch a bounce.

Of course, I was chasing a little because I was stubborn and tried to nail the perfect entry.

However, once I saw the stock running up… I couldn’t ignore the price action, so I decided to get in. I wasn’t looking for a massive winner, just 5-10%.

But the thing is, OSTK had massive upside potential, and it could’ve been good for a 20%+ winner.

Here’s a look at what happened with OSTK.

The stock hit a high of $8.83 that day… and I sold into the strength. I locked in about 10% overnight, a $9,000 profit overnight! I didn’t want to get greedy, so I sold ¾ of my position, and let the rest ride.

With this specific play (since I chased the stock), I need to properly risk manage. Since I already locked in a $9,000 winner, I wanted to let the rest ride. However, for the rest of my position, I actually put a stop-market order.

That way, if OSTK actually reversed, I wouldn’t give back all my gains and turn a winner into a loser.

Well, my order got hit at $8.50 on the remaining shares, so I still came out on top with about a 10% winner overall.

That was good for approximately $12,000 overnight!

The Rocket Pattern

Another one of my favorite setups is the rocket pattern. Basically, I’m looking for stocks poised to break out… and this was the case in Glu Mobile (GLUU).

I’ve talked about this a lot in Q4 2019 as a January effect trade, and this week I took it.

Here’s what I sent out to my premium subscribers:

“Few weeks swing, maybe more. In play above $6 with range to $7 if it works. Up on a down day today suggests someone is buying and nobody is selling which to me makes it a safer swing in an uncertain market.”

If you look at the chart above, GLUU was trending higher and reached a key resistance level. So I took the play.

However, since the market was a little shaky, I decided to take the base hit and lock down a $2,500 winner.

Last, but not least, I took a momentum play in Genetic Technologies (GENE).

The setup you see above is known as a “bull flag” setup. Typically, when we see this pattern, the stock rockets higher… and I was right on the money. Of course, I alerted my Elite clients about this trade… and guess what – this was good for another massive winner.

The story everyone in the small-cap world is talking about is IWM (the Russell 2000 ETF) and how its stalled into resistance.

Sure, $160 is an all-important level right now… but there are plenty of other trades going on… and I’m still hunting down to find my two bread-and-butter setups — the same ones I’ve used to crush small-cap momentum stocks in 2019 so far—and achieve my best trading results ever.

Right now, I am highly selective with my momentum stock trades. It’s the time to only take calculated trades — your best setups. If you’re piling into all the small caps that move… you’re just asking to be punished.

That’s why I only keep a handful of setups on my watchlist every single week.

In this very first edition of Momentum Plays of the Week, I’ve got 3 stocks on my watchlist — ones that provide us with a lot of leverage and potentially explosive profits.

FuelCell Energy (FCEL)

Again, small bet for me if I take it and reduced exposure overnight when possible. FCEL has been in the news lately, after the company announced it expanded its carbon capture deal with oil gian Exxon Mobil (XOM).

Source: Finviz

Right now, I’m looking for this as a Fibonacci retracement play.

Check out the chart above, FCEL ticked right down to a key Fib level and bounced. I’ll be keeping an eye on the 50% and 61.8% key levels for potential entries.

For now, I’m going to be patient and wait for the perfect entry, as with YRIV and ONVO. It doesn’t make a whole lot of sense to just jump in randomly right now.

I want to leave you with a pro-tip with these plays. Make sure you have a plan in place and adapt as you see chart patterns change and news come out.

[Ed. Note: Jason Bond runsJasonBondPicks.com and is a swing trader of small-cap stocks. In 2015 he earned a 180% return on his money. Then in 2016 he turned a $100,000 account into $430,000!Discover How He Did It]

Simple Chart Setup Uncovers A 23% in FCEL

The other day, FCEL announced a massive catalyst. The company announced it would expand a deal worth up to $60M with XOM.

For a micro-cap company, a $60M deal is pretty sizable.

At the time, I looked at the chart setup… and it looked pretty ugly. However, with this news, I figured it could fuel a run up all the way to $1.

When I pulled up the stock, I saw it up 50% that morning… and typically, when traders see a stock like that, they think they missed out.

However, that’s not the case with small-cap momentum stocks. I looked for signs of strength inside that day to position myself for a strong close by the end of the day. In other words, I was looking for an area of value to buy FCEL.

With a new CEO, this deal with XOM could be the turning point for the troubled green energy company. My plan was to trade smaller than usual, given how risky the stock is, and I looked for 20%+ same day or overnight on a gap.

The Play

If you know anything about trading momentum stocks… chart patterns work really well. When a stock has a massive gap up like FCEL did… there’s one simple charting tool I love to use — the Fibonacci Retracement pattern.

How does it work?

It’s really easy, all you have to do is identify a high and a low, and nearly every charting software will do the work for you.

Check out the 15-minute chart in FCEL below.

All I did was use the tool to connect the low (where it gapped up from) to the high that day.

That allowed me to find a key Fibonacci retracement level. If you look at the chart above, the 50% retracement level was right around $0.45. This lets me know it’s an area of value and there’s some support around there.

Generally, when we see stocks gap up like FCEL did and pull back to a key level, they run higher and attempt to break its high of the day.

[Ed. Note: Jason Bond runsJasonBondPicks.com and is a swing trader of small-cap stocks. In 2015 he earned a 180% return on his money. Then in 2016 he turned a $100,000 account into $430,000!Discover How He Did It]